British Columbia is introducing new legislation governing international financial businesses that aims to attract more business and jobs to the province.

The new International Financial Activity Act expands the roster of corporations that are eligible to register for tax refunds. The changes, which were announced in the 2004 provincial budget, expand the list of qualifying international business activities to include: certain treasury functions on behalf of non-residents, including back office and back-up operations; film distributors; a wider range of foreign exchange transactions; and, import letters of credit, used by Canadians to buy foreign goods.

Previously, registration was restricted to defined financial institutions. The program is also being extended to all areas of the province by eliminating a requirement that the business be located in the Greater Vancouver area.

Finance minister Gary Collins said the new legislation will create jobs and spur new B.C.-based international activities.

“We are making British Columbia more competitive on the financial world stage,” said Collins. “By modernizing the legislation and expanding the list of financial activities that qualify for corporate tax refunds, we’re setting the stage for renewed growth in the international financial business sector.”

“This is one of the most visionary pieces of financial legislation in British Columbia in years,” said Robert Fairweather, president of the International Financial Centre in Vancouver. “This paves the way for B.C. to compete with other international financial centres like Singapore, Dublin, and Amsterdam, and we expect to see an increasing number of companies setting up offices in the province.”

The eligibility changes will take effect on September 1.

The province is also eliminating the provincial tax benefit for employees engaged in international financial activities, effective January 1, 2005. The government says that B.C.’s new competitive personal tax rates make this specific tax incentive no longer necessary to attract employees. The tax refund remains for highly skilled specialists who come from outside Canada to work in the international financial sector, and specialists may now receive the refund for five years, up from the current two years. The refund is reduced from 100% to 75% of B.C. income tax payable.